I drive a Ford Focus 14 and I've had it for 2 years now. The first time I bought it, I knew I had to get insurance to be able to drive it off the lot. After that I couldn't afford insurance since my car payment was almost $400. I kept my insurance for 2 months, on the 3rd month, the bank informed me that I
I drive a Ford Focus 14 and I've had it for 2 years now. The first time I bought it, I knew I had to get insurance to be able to drive it off the lot. After that I couldn't afford insurance since my car payment was almost $400. I kept my insurance for 2 months, on the 3rd month, the bank informed me that I would now have to pay $500 a month bc I didn't have insurance for my 3rd month. So I had to get my car insurance back again and the bank told me that I had to pay the new amount $500 for a whole year bc of that. So I have done that now for 2 whole years straight and my payment is back to $400 a month. Now do I still have the have this insurance and pay my penalty with the bank after 2 years or I am OK now? Car insurance is $120 a month. I am almost up on my insurance car payment and I am not really able to afford it anymore and i know I can refinance or trade but I'd rather not. So i really wanna knoe the answer since i am lookimg at my options. Thank you for your help
Although some people appear unaware, not all places require purchase of auto insurance by law. Most do, though, but let's assume you have no legal obligation to buy insurance. The bank can (and apparently has) made insurance a condition of your loan. In effect, your car is collateral on the loan (they could seize the car and sell it to cover your debt if you fail to pay it), and thus there is NO benefit to the lender to see the car get destroyed by an uninsured owner. It is just like how I have to insure my house, because the bank made that a condition of my loan.
And I will be honest, despite understanding the thinking you have, I do not much agree with your conclusion. If you cannot afford to insure the car, you shouldn't have bought one. You CAN afford insurance, what you apparently have difficulty with is car payments AND insurance. Your problem is fairly common, and that is wanting something and buying it even though you really can't afford it. If you cannot afford to insure the car, then you should not have the car. It is that simple. You should have bought an older car rather than a new one. Insurance would have been less and your monthly payments for the car (if you even had any) would have been less.
Yes, you need liability car insurance in order to legally drive a vehicle. If the car is still being financed, you will also be required by the lender to have comprehensive and collisions coverages until the loan is paid off.
All cars need to be insured to keep them on the highway and or drive them.
If your car is on finance full coverage is a requirement of the loan.
If not you can chose liability only however if anything happens you have to pay the damage if no one else is liable or they have no insurance.
Where I am no insurance is an instant seizure of the car leaving you to walk home.
That wasn't a penalty charged by your lender, it was insurance coverage of sorts.
When you signed up for the loan, you used the vehicle itself as collateral to get a lower interest rate. Then you thought you could cancel your Collision and Comprehensive coverage, which the loan agreement said you must carry, without the lender noticing. You thought wrong. When you cancelled your personal auto insurance, the lender added lienholder's contingency coverage to your vehicle and billed you for the cost. That wasn't a penalty, it was the cost of the lienholder's coverage.
If you have valid auto insurance, including the coverage you agreed to carry, give a copy of the policy to the lender and ask them to stop billing you for the contingency coverage.
The government requires you to insure a vehicle as long as you are driving it. It doesn't matter if you have a loan or not. The loan company also requires insurance so they don't suffer a loss if your car is totalled or stolen.
Almost every place in the world requires you carry liability insurance. Nothing else is required by law. That said, if you still owe money on your Focus (which you indicated talking about payments), your lender undoubtedly requires you have full coverage – comprehensive and collision in addition to the liability. So yes you still need car insurance.
You always need insurance to drive legally. When a vehicle is financed you must carry full coverage. After Ayer off you may if you choose carry liability only, but you must carry that minimum to be legal.
Your car needs to be insured at all times, every second! Coverage can never lapse.
I strongly suggest that you sit down with your lender AND your insurance agent and learn how this all works. If you don't I predict that you are going to find yourself in a big heap of trouble. Based on your question(s) You are heading that way as we speak
You have to have car insurance. End of story. You think YOU can cover the cost that would result from driving into a queue of people at a bus stop.